Compliance with the obligations under the Court Enforceable Undertaking regarding ANZ’s fees for no service conduct for its Prime Access service is now finalised.
The Australian Securities & Investments Commission (ASIC) today announces that it finds that Australia and New Zealand Banking Group Limited (ANZ) has complied with the Court Enforceable Undertaking (CEU) entered into with ASIC in March 2018 regarding ANZ’s fees for no service conduct for its Prime Access service.
The regulator explains that, on May 31, 2019, it received an audited attestation from ANZ. ASIC is satisfied with the audited attestation and the independent expert report. Compliance with the obligations under the CEU is now finalised, except for the payment of some remaining refunds due to clients. This is poised to be completed by mid-July 2019.
ANZ has attested to the following as required under the CEU:
- the changes to ANZ’s systems, controls and processes that have been implemented in response to the fees for no service conduct;
- that ANZ has provided documented annual reviews to Prime Access customers who were entitled to such reviews in the period from January 2014 to March 2018;
- in the 1,410 instances where documented annual reviews were found to have not been provided, ANZ is in the process of refunding those customers (with remediation expected to be complete by mid-July 2019); and
- that ANZ now has systems, controls and processes that seek to ensure documented annual reviews are being provided, and that instances of non-delivery are detected and remediated.
ANZ has announced it will stop offering the Prime Access service to new customers and will phase it out for current customers over the next 18 months. ASIC says it will monitor the phasing out of Prime Access.
Let’s recall that, in March this year, the Australian regulator published an update on review programs undertaken by AMP, ANZ, CBA, Macquarie, NAB and Westpac regarding FFNS failures. ASIC back then warned that that most of the institutions were yet to complete reviews to identify systemic FFNS failures beyond those already identified and reported to ASIC since 2013. The reports were delayed and incomplete, the regulator said.
ASIC’s FFNS supervisory work includes overseeing the institutions’ programs to compensate customers impacted by the reported failures to provide advice services paid for by customers, as well as the institutions’ reviews to determine if there were further systemic FFNS failures on top of those already identified and reported to ASIC.
Under the compensation programs, AMP, ANZ, CBA, NAB and Westpac have collectively paid or offered about $350 million in compensation to customers who were charged financial advice fees for no service at the end of January 2019. Additionally, the institutions have provisioned more than $800 million towards potential compensation for further systemic FFNS failures.